From This Corner - Locals can complain tomorrow over higher insurance premiums

Written by Paul Gauvin

May 04, 2007

People with religious convictions don't have to pray to God anymore when there are hurricanes howling up the coast -- but they do have to be insured.

That's the belief that has been bred into insurance consumers and mortgage holders, giving the underwriting industry a psychological and economic hold on consumers made dependent by the fear of losing out on a gamble to Mother Nature's intermittent terrorism.

Bolstered by a captive clientele, insurers are running over coastal communities with a blitzkrieg of premium increases that, as some courageous and concerned Cape Codders testified before insurance regulators last week, are "devastating."

It seems representatives from the Town of Barnstable were conspicuously absent from this important Hub protest. They have the opportunity to make it up tomorrow when a forum on the topic of rising homeowner insurance on Cape Cod is held at 2 p.m. in the Tilden Arts Center of Cape Cod Community College.

State Sen. Robert O'Leary and Paula Aschettino, who are fighting to reform the industry and freeze the premiums, will wear the white hats on the panel while the black hat will be on the head of Jack Golembeski, president of the Massachusetts FAIR plan, the state's increasingly expensive insurer of last resort. He has the unenviable task of telling Cape Codders what they don't want to hear -- the industry perspective. One trusts Barnstable leaders will be present to articulate for embattled homeowners.

Remember the slogan of a major insurer that you were "in good hands" when you placed your faith -- and your money -- with them? Well, those hands today are squeezing the beejeebers out of little old men and ladies who honestly believe they will lose their homes as insurers add mightily to inflation, the Pac-Man of household budgets that is chomping upon our dollar bills despite what George Bush says.

If it were only homeowner insurance premiums skyrocketing, the issue probably wouldn't be getting so much attention. But the industry's snooty demands for gigantic premium increases are being piled on top of budget-busting spikes in gasoline prices, home heating fuels, electricity and the incessant prodding to spend more by credit card issuers and cable TV vendors.

The final signal that inflation's ugly face has surfaced is to be found in our bastions of savings -- the big box and discount stores where bananas that a few weeks ago cost 99 cents for three pounds are now $1.14 and a gallon of milk that was selling for $1.99 is now $2.35. We'd rather not say what moo juice costs in the local supermarkets.

And you've got to admire the sinful spin insurers put on the last-resort risk pool we know as FAIR. (FAIR to whom?) They say FAIR offers coverage to homeowners "who can't get insurance from other providers" -- making it sound as though the homeowners did something wrong. Gee, why did Sam lose his insurance? Did he try to burn his house down? Purposely fall off a ladder and break his legs?

The proper spin is not that consumers can't get insurance. It is more precise to say that a conceited industry is conspiring to deny its customers fair coverage at honest prices and conspiring to change the sharing nature of insurance. It is the insurers who deny access to loyal customers who have done no wrong and who have rarely if ever collected on their premiums.

This issue provides intriguing fodder for conspiracy theorists.

A group of insurers connive, after lobbying legislators, to each dump a massive number of coastal clients, forcing them to buy from FAIR. Consumers have no other choice because none of the other insurers will write policies in coastal areas at reasonable prices.

FAIR is an association of those same insurers who are using FAIR to stockpile huge amounts of profit, Meanwhile the risk to the individual insurance companies who own the association declines and, one presumes, their profits rise handsomely.

Once FAIR has more than doubled premiums over a year or two, a higher threshold will have been created by FAIR, a government sanctioned body, from which member insurers can now base their premiums that are rising faster than consumers' blood pressure.